SERVICE TAX
Salaries And Consultancy Reimbursements To Foreign Joint Venture Not Taxable: CESTAT Chennai
The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) on 5 February held that reimbursements made by an Indian company to its overseas joint venture do not constitute consideration for taxable services and are therefore not liable to service tax under the Finance Act, 1994. A Bench comprising Judicial Member P. Dinesha and Technical Member Vasa Seshagiri Rao dismissed the appeal filed by the Revenue and upheld the order dropping the service tax demand against...
Forfeited Security Deposits And Tender Fee Do Not Attract Tax: CESTAT Delhi
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) on 3 February held that forfeiture of the Earnest Money Deposit (EMD), Security Deposit (SD) and collection of tender fee do not attract service tax, as such amounts cannot be treated as consideration for a declared service under the Finance Act, 1994. A Bench comprising Judicial Member Dr. Rachna Gupta and Technical Member Hemambika R. Priya, allowed the appeal filed by RajComp Info Services Limited, an...
Bombay High Court Reiterates That Service Tax Is Not Applicable On Legal Services
The Bombay High Court recently allowed a writ petition filed by an advocate, holding that legal services rendered by an advocate are exempted from levy of service tax. On 5 February, a Bench of Justice G.S Kulkarni and Justice Aarti Sathe held that the proceedings were squarely covered by the Court's earlier decision in Advocate Pooja Patil v. Deputy Commissioner. The Court observed: “8. The present proceedings also would stand covered by such notifications and the position in law as held by...
Service Tax On Ocean Freight In CIF Imports Illegal: Karnataka High Court
The Karnataka High Court has held that service tax cannot be levied on ocean freight in imports made on a CIF (Cost, Insurance and Freight) basis, as such services fall outside the scope of the Finance Act, 1994.“The Act itself would be inapplicable to territories other than India and the Executive would not have the power to make rules for territories beyond India and where the events could be described to be extra territorial events i.e., service provided by a foreign exporter and a...
Superintendent Cannot Adjudicate Cases Involving Extended Limitation: Calcutta High Court
The Calcutta High Court on 2 February held that cases that invoke the extended period of limitation are expressly excluded from the adjudicatory powers of a Superintendent, even if the demand falls within their monetary limit. Justice Om Narayan Rai, allowed a writ petition filed by the partners of Radiant Security, challenging an order by which the Superintendent, CGST, demanded service tax of Rs. 72,000 along with education cess and secondary and higher secondary cess, and imposed penalties...
Calcutta High Court Upholds Service Tax On C&F and Transport of Steel, Excludes Bending & Bundling
On 4 February, the Calcutta High Court held that service tax applies to “Clearing and Forwarding” (C&F) services and transport expenses for steel products. The Court clarified that activities such as transporting, storing, forwarding, and record-keeping fall within the scope of C&F services, while bending, bundling, and stock verification of goods do not. A Division Bench of Justices Rajasekhar Mantha and Ajay Kumar Gupta dismissed an appeal by Naresh Kumar & Co., which claimed...
Are Skin & Hair Care Treatments Taxable As Cosmetic Surgery? CESTAT Delhi Seeks Fresh Examination
The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), on 30 January, asked the lower authorities to re-examine whether skin and hair care treatments provided by a clinical establishment qualify as “Cosmetic and Plastic Surgery Services” and are therefore liable to service tax. A Bench comprising Judicial Member Binu Tamta and Technical Member Rajeev Tandon was examining an appeal filed by Trichoderm, a Delhi-based clinical establishment operating under the brand...
Police Security Services Exempt From Service Tax Prior To June 2012: Madras High Court
The Madras High Court has allowed a plea seeking service tax exemption for police guard charges and escort duties, holding that such activities carried out by the State Police do not fall within the service tax net prior to 1 June 2012.A Division Bench of Justice Anita Sumanth and Justice Mummineni Sudheer, in a judgment delivered on 12 December 2025, examined service tax liability by referring to the definition of 'person' under the General Clauses Act.They noted that the Service Tax law...
Service Tax Demand Based Solely On IT Returns Is Presumptive: CESTAT Mumbai
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that a service tax demand based solely on differences between income tax and service tax returns is presumptive. A Bench comprising Judicial Member S.K. Mohanty and Technical Member M.M. Parthiban, on 7 January 2026, set aside a Rs. 7.05 crore service tax demand raised on MM Construction, a civil contractor engaged in road construction and drainage improvement works for municipal and government...
Fixing Hearing Dates Without Virtual Links Violates Natural Justice: CESTAT Delhi
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that when an appellate authority fixes hearing dates without providing virtual hearing links, it violates the principles of natural justice and renders the opportunity of hearing a completely nugatory, hollow formality. A Bench comprising Technical Member Rajeev Tandon was hearing an appeal filed by M/s Meera Bux Neelgar against an order passed by the Commissioner (Appeals), Central Excise &...
Supreme Court Stays CESTAT Order Against Prism Johnson In ₹11.25-Crore Service Tax, CENVAT Credit Case
The Supreme Court on Monday, issued notice and granted an interim stay on an order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi against listed building materials company Prism Johnson Limited. The tribunal had upheld a service tax demand of about Rs 11.25 crore and denied CENVAT credit of around Rs 7.70 crore in related excise proceedings. A bench comprising Justice J.B. Pardiwala and Justice Vijay Bishnoi passed the order after hearing senior counsel...
